According to the data released by the National Bureau of statistics and the Federation of logistics and procurement, China’s manufacturing procurement manager index (PMI) was 47.4% in April, down 2.1 percentage points month on month, still falling in the contraction range. The non manufacturing business activity index was 41.9%, down 6.5 percentage points from the previous month.
Cai Jin, vice president of the Federation of logistics and procurement, said that since late April, various policies for epidemic prevention and control have been more accurate, and various support policies have been issued for ensuring the main body, ensuring smooth flow, promoting consumption, strengthening investment and stabilizing employment. After experiencing a short-term impact, China’s economy is expected to return to the track of stable recovery.
“On the whole, the manufacturing PMI data clearly reflects the pressure of falling domestic demand. The inventory of finished products has rebounded online for the first time since June 2012, which also shows the pressure of domestic demand.” Yang Chang, head of the policy group of Zhongtai Securities Co.Ltd(600918) Research Institute and chief analyst, believes that the Politburo meeting held on April 29 will also focus on expanding domestic demand. As the epidemic situation is gradually controllable, the policies that have been issued in the early stage are expected to accelerate the implementation and take effect. The introduction and implementation of stock policies and incremental policies are expected to promote the expansion of domestic demand.
manufacturing PMI remains in the boom and bust, and offline consumer goods manufacturing is relatively stable
From the sub index of manufacturing PMI, the impact of short-term factors such as multi-point spread of China’s epidemic and international geopolitical conflict is still continuing. Among them, the production index and new order index were 44.4% and 42.6% respectively, down 5.1 and 6.2 percentage points from the previous month; The supplier delivery time index was 37.2%, down 9.3 percentage points month on month; The finished goods inventory index rose 1.4 percentage points to 50.3% from the previous month.
Zhao Qinghe, Senior Statistician of the service industry survey center of the National Bureau of statistics, said that the supplier delivery time index continued to decline this month, and the finished product inventory index rose to a high point in recent years. Many enterprises reported that the logistics and transportation difficulties had increased, and even the supply of main raw materials and key parts, poor sales of finished products, inventory backlog and other situations had a great impact on the production and operation of upstream and downstream related enterprises.
Zheng Houcheng, director of Yingda Securities Research Institute, believes that the delivery time of suppliers decreased significantly in April compared with the previous value, which is mainly affected by road control. The Politburo meeting pointed out the need to “ensure smooth transportation and logistics”. It is expected that the delivery time of suppliers in May will be higher than that in April.
By industry, high-tech manufacturing and consumer goods manufacturing were relatively stable in April. Among them, the PMI of high-tech manufacturing industry was 50.1%, which decreased slightly by 0.3 percentage points compared with the previous month and remained above 50%. Although its new order index decreased, the production index increased by 1.1 percentage points compared with the previous month. In addition, the PMI of consumer goods manufacturing industry was 48.4%, which was 0.9 percentage points lower than that of last month, but 1 percentage point higher than that of manufacturing industry.
“In April, although the short-term factors had a great impact, the high-tech manufacturing industry continued to play a better ability to resist the risk of the epidemic and achieve stable operation.” Wen Tao, an analyst at China Logistics Information Center, said that in addition, governments at all levels have actively implemented the guarantee of living materials, focused on ensuring the stability of materials in epidemic areas and promoting the connection of production and marketing of relevant materials. Under the support of these policies, the consumer goods manufacturing industry has maintained a relatively stable operation.
In terms of enterprise scale, the PMI of small and medium-sized enterprises decreased by 1.0 percentage points to 47.5% and 45.6% compared with the previous month, but the decline was lower than that of manufacturing PMI, and the decline of production index and new order index of small and medium-sized enterprises was lower than that of the overall supply and demand index of manufacturing industry.
Wen Tao said that in April, although the impact of short-term factors continued to exist, the stability of small and medium-sized enterprises was consolidated driven by the active policies of governments at all levels to protect market players, especially the practical support for the development of small and medium-sized enterprises.
non manufacturing PMI continues to slow down, and civil engineering construction industry maintains high prosperity
Among the non manufacturing PMI single indexes, the new order index, new export order index, on hand order index, inventory index, employee index, supplier delivery time index and business activity expectation index decreased in April, with a decrease of 1.0 to 8.3 percentage points.
Market participants pointed out that affected by the epidemic, the non manufacturing economy continued to show a downward trend in April. Both the business activity index and the new order index fell to a low level, with a month on month decline expanding.
By industry, the business activity index of the construction industry is 52.7%, which is still in the expansion range, although it is 5.4 percentage points lower than that of the previous month. Among them, the business activity index of civil engineering construction industry was 61.0%, which was in the high boom range for two consecutive months, and the new order index was 52.3%, continuing the expansion trend.
Zhao Qinghe said that with the moderate advance of some major infrastructure construction, the civil engineering construction industry has maintained a rapid construction progress, which has played a supporting role in the recovery and development of economy and society.
Cai Jin also pointed out that although the business activity index of civil engineering construction industry related to infrastructure fell, it remained at more than 60%, and the release of infrastructure investment was still strong. With the impact of the epidemic under control, the delayed consumer demand is expected to be released in a centralized manner, driving China’s economic recovery.
